“It’s complicated” might be the best way to describe the relationship many millennials have with money.
Here’s why: While young adults transition to financial responsibility, it can be a struggle to stay ahead, especially if you’re early in your career and aren’t earning enough to keep up with the rising cost of living. In fact, you may even be living paycheck to paycheck or be saddled with student loan debt. If this sounds like you, you probably aren’t in any place to save for a house or retirement.
If you can relate, here are seven budgeting tips to help you start saving money.
Ignore the Joneses
Before making any tangible budgeting moves, think about your financial state of mind. Are you spending too much or living beyond your means just to impress friends or strangers?
“Comparing yourself to what others have, constantly upgrading your lifestyle just to keep up with friends, family, or trends on social media can hurt your pockets and put you in unnecessary debt,” says Todd Kunsman, a millennial personal finance expert and founder of Invested Wallet.
“Keeping up with the Joneses” is just another way of covering insecurities with wasteful spending. Adopting a new mindset will help you spend smartly and avoid succumbing to lifestyle inflation. This way you’ll have more cash on hand to invest and save.
Start that budget
Before you can start determining how much to save, how much to spend or anything in between, you’ll need to create a budget. How else will you know how much money you’re bringing in, and how much you’re letting go?
There are a host of budgeting apps to help you out, like Mint, You Need a Budget, and Mvelopes — and of course, you can use the mobile banking option with the Chime app. Tap into technology with these budgeting tools and you can create custom categories (i.e. rent, eating out, groceries, utilities, entertainment, student loans and other expenses), and create a monthly budget based on your income and expenses.
Connect with your Credit
Don’t let student loan debt discourage you from opening a credit card. And if you have no credit history, not to worry; there are credit cards designed for people looking to create and build credit.
College students, new grads and those early in their careers can look for a secured credit card. Unlike an unsecured credit card – where your card provider gives you a credit limit to borrow against – a secured credit card is, like its name says, “secured” by a refundable cash deposit. You’ll need to deposit a designated amount in order to set your credit allowance. Once you start establishing a positive credit history, you’ll be able to qualify for an unsecured credit card at higher credit limits and lower interest rates.
Once you’ve got your card, it’s time to check your credit. Signing up for a site like CreditKarma.com allows you to view and monitor your credit score and credit history. You can also access a free credit report at AnnualCreditReport.com.
Cut back on unnecessary dining out expenses
It’s hard to resist the temptation to eat out every night or give up those daily Starbucks runs. But this can really eat into your budget.
Cutting back on some of these expenses and making your own meals, however, can make a huge difference.
“I’ve stopped getting a cup of coffee a day and instead I carry instant coffee singles and on the go creamer and I just find a cup of hot water. When I do the math, my singles and creamer cost about $80 a year and my Grande Blonde at Starbucks a day would cost me $876. That’s a savings of almost $800,” says Cheek.
One of the best ways to save money on eating out is to make your own meals.
“There are so many avenues to learn how to cook — through reading a cookbook, visiting food blogs, and watching YouTube videos — and it will save you a lot of money in the long run,” says Deborah Sweeney, CEO of MyCorporation.com.
If you must spend on necessities, do it smartly and frugally.
“Thrift shops and couponing can be your best friends,” says Kunsman of Invested Wallet.
Kunsman advises using coupons whenever possible. “Groceries can get expensive, but they don’t have to be with smart shopping. This should be a no-brainer, but so many people in my generation or younger don’t take the time.”
Steven Sinatra is a millennial who runs a pawn shop named World Pawn Exchange with his father, and advocates buying things second-hand when possible.
“If you simply must have something, look around for it used before buying new. You can find basically anything on eBay used,” says Sinatra.
Get a side gig
A balanced financial plan doesn’t just mean scaling back or scrounging for discounts. It should also include new ways to make money. That’s where side hustles come in.
If you have a 9 to 5 job already, find a side gig that you can fit into your schedule, or one that complements your talents. You might try tutoring or driving for a rideshare company. You can even get paid for signing up for clinical studies or being a mystery shopper. And if you’re creative or crafty, sell baked goods. The opportunities for earning cash are limitless.
Set savings goals
It can be hard to stick with a budget, but if you identify financial goals, you’ll have an idea of where you’d like to be in a few months, next year, or even in a decade.
“Life and your budget is all about priorities,” says Ashley Patrick, a financial coach and founder of the site Budgets Made Easy.
“You can still have fun on a budget, you just have to set money aside for it. It doesn’t have to be super restrictive where you work all the time and don’t do anything. It’s just about prioritizing. If being debt-free is important, then make it a priority in your budget,” says Patrick.
How Chime can help
Another tip to keep in mind: Automate your savings. An online bank account with Chime automatically deposits money into a savings account. This way you can save money without thinking about it. The Chime app is intuitive, and tracks your spending and savings as you go.
Remember that once you start budgeting, you’ll see what works for you and your money. And, by following these seven tips — plus using the Chime app — you’ll be on your way to successful budgeting. You may even find yourself giving helpful advice to your friends and family.